--%>
Assignment Help - homework help

Demand-pull inflation

What is "demand-pull" inflation?

E

Expert

Verified

This is a common form of inflation in which demand outstrips supply to cause a rise in price and therefore inflation. In the AD AS approach in macroeconomics, it is shown as a continuous rise in AD with a constant AS. This rise can be due to a rise in any of the components of AD- consumption spending, investment spending, and government spending or net exports. If the economy is not on full employment level then the rise in price is accompanied by a rise in GDP as well. However if the economy is already at full employment then there is no rise in GDP, only price rises. This kind of demand pull inflation is less acceptable and more damaging to the economic agents. 

   Related Questions in Macroeconomics

  • Q : Explain Tax rate increase. A change in

    A change in tax rate changes the IS equation, LM equation remaining the same. Let same, let us suppose that the government raises the tax rate from 20 percent to 25 percent<

    		•
  • Q : Evaluation of net present value Explain

    Explain evaluation of net present value (NPV) and internal rate of return (IRR) in brief?

    		•
  • Q : Another name of macroeconomics What is

    What is another name of macroeconomics? Answer: Income theory

    		•
  • Q : Issues of macroeconomic policy Hello

    Hello guys I want your advice. Please suggest your answer for following economics problems. Macroeconomic policy matters focus upon: (w) price determination within specific markets. (x) conduct and structure of mar

    		•
  • Q : Value added technique for national

    What is the alternative name of value added technique of estimating national income? The alternative name of value added technique of estimating national income is production method.

    		•
  • Q : What is substitutes Substitutes : The

    Substitutes: The two goods for which a rise in the price of one good leads to a rise in the demand for another.

    		•
  • Q : One party to a transaction deceives

    If one party to a transaction deceives another party prior to a deal be reached, this is termed as: (i) Bad luck. (ii) Adverse selection. (iii) Moral hazard. (iv) Polyandry. (v) Rational ignorance. Please someone suggest me the rig

    		•
  • Q : Economics Hello. I need help with my

    Hello. I need help with my assignment, I was sick and lost alot of time.My submission deadline is tomorrow i need your help i have attached the questions Thanks in advance

    		•
  • Q : Define Price What do you understand by

    What do you understand by the term Price (P) at Market in Economy?

    		•
  • Q : Market imperfection associated with

    Question: This assignment in Economics, deals with macro-economics. An essay on Market imperfection associated with negative externalities. According to Economics, perfect markets would require an "invisible hand" to allocate all the resources to be a

    		•